evaluating passenger's perceived service value, satisfaction and ...

Sci.Int(Lahore),26(4),1749-1755,2014

ISSN 1013-5316; CODEN: SINTE 8

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EVALUATING PASSENGER’S PERCEIVED SERVICE VALUE, SATISFACTION AND BEHAVIORAL INTENTIONS IN AIRLINE SERVICES BY FLIGHT CATEGORY: A STUDY OF SERVQUAL 1

Faisal Tehseen Shah, 2 Abeer Imam, and 3 Zaineb Syed, MS Scholar [email protected] [email protected]

[email protected] Department of Statistics, 2&3 Department of Management Sciences, COMSATS Institute of Information Technology, Lahore 1

ABSTRACT: SERVQUAL has always remained a best and strong tool to identify the discrepancies in customer expectation and their actual experience about the quality of service provided by the company and their satisfaction. Passenger’s perception, their satisfaction and behavioral intentions can be properly judged by using the SERVQUAL. This study measures airline service quality based on data collected at a Pakistani International Airline through survey. Analysis is done using independent sample t-test. Study reveals that flight category is significant variable for measuring passenger perception and satisfaction. The results demonstrated that both domestic and international passengers perceive the service value equally and also likely to travel with same airline in the future but their satisfaction level differs. Additionally, with respect to flight category SERVQUAL perceptions on Responsiveness, Assurance and Empathy remain same but on Tangibles and Reliability dimensions it significantly varies. Future recommendations for researchers and managers are also presented. Keywords: Airline service quality, Flight category, independent sample t-test, Passenger’s Perception, Passenger’s satisfaction, Behavioral Intentions. PIA, Pakistan 1. INTRODUCTION: The discussion of service quality (SQ) has become a critical consideration in competitive world. Service quality can be explained as the gap between expectations about the service, before usage, and perceptions about the service after it is consumed. It represents that if perception is more than what was expected than the service will be considered outstanding. Likewise, service is measured as good if perception is same as expectation and if the service is not up to the expectation then it will be judged as bad [1]. Therefore, it is essential for organizations to measure SQ from the customer’s perspective so as to know their feedback and hence improve themselves. Many empirical studies have explored the associations among the dimensions of SQ and customer satisfaction in various sectors and different cultures. Such studies include the banking industry in Taiwan [2], health-care sector in South Africa [3], audit industry in Malaysia [4], recreation industry in the USA [5], hotel industry in Taiwan [6] the lodging industry in the USA [7], and particularly in airline industry, study in Korea [8], in Turkey [9, 10], in Taiwan [11] and in India [12] involving different SQ dimensions and links to outcome variable(s). Literature shows that [9] and [13] have measure and compared passenger’s perception on service quality in the airline industry based on their educational level and ethnicity and their purpose of travel respectively. [9] reported educational level as an important variable affecting their perceptions and expectations. Moreover, [13] found significant differences among passengers of different ethnic groups/nationalities as well as among passengers who travel for different purposes, such as business, holiday and visiting friends/relatives.

This study is different from prior study as it addresses the gap mentioned by [14] that an empirical examination is needed to assess how domestic passengers’ perception of service quality and behavioural intentions are different from international passengers. 1.1 Need/Gap/Rationale of Study: Pakistan International Airlines offers domestic and international flights to passengers within the country and abroad. This airline has experienced decreased passengers satisfaction due to lack of their focus on customers and to the competition. Therefore, it has become necessary to under take a study that measures the passengers’ satisfaction and their behavioral intentions using the SERVQUAL. PIA was never studied before to access the level of passengers’ satisfaction and their behavioral intentions. Therefore, this study is destined to check how the PIA’s flight category (both domestic and international) are perceived by passengers as same or different. 1.1.1 Problem Statement: Passengers’ satisfaction and behavioral intentions play a major part in any airline service provider organization. Being the important airline of Pakistan, this study will find the any perceived difference in flight category of PIA especially in services they provide, passengers’ satisfaction, passenger perceived service value and behavioral intentions. 1.1.2 Research Questions: 1. How Service Quality Perception of airline passengers differ by the flight category in PIA? 2. How Perceived Service Value of airline passengers differ by the flight category in PIA? 3. How Passengers’ Satisfaction of airline passengers differ by the flight category in PIA? 4. How Behavioral Intentions of airline passengers differ by the flight category in PIA?

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2. LITERATURE REVIEW: 2.1 Service Quality in Airline Industry: In 1987, airlines’ performance was given focus and importance, which consequently led to increased consumer awareness regarding airline quality and the means to file complaints [15]. Quality of service has great importance in airline industry and to deliver what the companies promise is the cornerstone of a further relationship building strategy. In order to become successful, the airlines should gain full knowledge of their current and potential customers [16]. If airlines are able to deliver precisely what they promise in terms of services such as safety, punctuality, aircraft cleanliness, and efficient baggage handling then they would have accomplished their target and gain support from their customers. Otherwise, they will be known as the airline to avoid which no organization wants [16]. Therefore, the importance of airline industry sector in the economic development of a country can’t be denied. It facilitates in people or products mobility from one place to another, whether within the country or beyond borders. Since the past decade, as the air transport market is becoming even more challenging and competitive, many airlines are now focusing on airline SQ to increase passenger satisfaction [12]. Furthermore, [17] and [18] suggested testing the effect of SQ performances on customer satisfaction because services can’t be tested by the customer until and unless they have not consumed it. 2.2 Passengers Perceived Service Value, Satisfaction and Behavioral Intentions: It’s a human nature that a customer perceived the value of the service provided after considering the monetary and nonmonetary factors (e.g. time and effort). Many researches have reported that SQ has a positive impact on perceived value [19]. [11] stated that whenever passengers’ satisfaction is examined perceived service value has always been ignored in the air transport context. Customer satisfaction is “a judgment that product/service features make customer to reach at a pleasurable level of consumption-related fulfillment” [20]. Customer satisfaction is characterized on the basis of the evaluation that customer made after experiencing the service provided by the organization [8]. There are three behaviors which are associated with “financial growth” and “the market share of a firm”. These are: word-of-mouth, repurchase intention and feedback to the service provider [21]. 3. HYPOTHESES FORMULATION: In order to address the gap identified by [14] and additionally to test whether passenger satisfaction and perceived service value vary or not, following research hypothesis have been formulated: H1. Service quality perceptions of airline passengers vary by flight category. H2. Perceived service value by airline passengers vary by flight category. H3. Passenger satisfaction varies by flight category.

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H4. Behavioral intentions of airline passengers vary by flight category. 4. METHODOLOGY: 4.1 Questionnaire Design The questionnaire designed was consisted of three parts i.e., Part-I was designated to get information about respondent’s demographics. Part-II was destined to measure the respondent’s perception, based on the SERVQUAL questionnaire consisting of 22-items, it was destined to measure the airline service quality. Part-III measured the Perceived Service Value, Passenger Satisfaction and Behavioral Intentions. Those items are adopted from prior studies of [8, 11, 22]. Part-II & Part-III was measured on the 5-points Likert scale ranging from 1=strongly disagree to 2=strongly agree. 4.2 Sampling Technique and Data Collection To get the representative sample, a Two-step Sampling technique was implemented. Systematic sampling was used at first stage to select the respondents. At this step, respondents were selected from every 2nd flight of the day, as per the airline weekly flight schedule is available [23]. 2nd stage involved the use of Purposive sampling as used by [19]. The major limitation on selection of respondent was that he should have travel experience of more than 1 year with the national airline. Passengers were also requested from boarding lounges at Allama Iqbal International Airport, Lahore, Pakistan (both from domestic and international) to give their response on the questionnaire. There were 342 questionnaires rotated among respondents to get insight for the study. 4.3 Analysis Techniques: This study has used SPSS-17th edition to run the statistical analysis on the data collected. Reliability analysis, correlation statistics and t-tests were used to interpret the information collected at the Allama Iqbal International Airport, Lahore. 5. RESULTS & DISCUSSION: 5.1 Reliability Cronbach’s Alpha is the most extensively used to test the internal consistency of the scale [24]. Value of Cronbach’s alpha is always between 0 to 1 (showing zero internal consistency to perfect internal consistency). Value of 0.7 or above is considered to be acceptable [25, 26]. This study showed that the internal consistency in table 1. All variable exists in the acceptable range except 0.629, which can also be considered a good reliability index as referred by [27]. 5.2 Validity: The questionnaire was constructed with an acceptance of the general validity of the SERVQUAL [28]. Moreover, a pilot study was carried out to check the validity and reliability. The questionnaire was also examined by experts of the area and their contributions were incorporated to enhance its effectiveness.

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Table 1: Reliability Analysis Construct Tangibles Reliability Responsiveness Assurance Empathy Perceived Service Value Passenger Satisfaction Behavioural Intentions

Cronbach’s Alpha 0.629 0.754 0.733 0.747 0.814 0.734 0.866 0.858

Control Variables Gender Male Female Age under 21 21-30 31-40 41-50 51-60 above 60 Educational Level School College University Occupation Student Businessman Employee of a private company Government employee Other Purpose of Travel Business Holiday

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5.3 Demographics: Table 2 shows the demographic profile of the respondents. It explains that mostly male and the people aged between 3140 years participated in the survey. Also passengers were mostly had university degrees and were employees in a private company. Moreover, the respondents mostly travel because of personal reasons. 55.8% international passengers and 44.2% domestic passengers, out of 342 sample size, participated in the survey. Mostly respondents travelled in economy class in seat category. When asked who selects airline for them, most of the respondents mentioned that they themselves select and the price is always the most important attribution while making the choice.

Table 2: Passenger/Respondent Profiles % of Total Control Variables Respondents Personal 65.5% Other 34.5% Flight Category Domestic 9.9% International 23.4% Seat Category 33.3% Business Class 15.2% Economy Class 12.3% Who selects airlines for you? 5.8% Myself Family 5.8% Travelling Agent 25.1% Friends 69.0% Other The most preferred attribute 22.8% Price 18.1% Advertisements 27.5% Past experience 14.0% Recommendation 17.5% Other

% of Respondents 36.8% 4.7%

Total

44.20% 55.80% 21.60% 78.40% 56.10% 27.50% 9.40% 2.90% 4.10% 39.80% 9.90% 19.90% 7% 23.40%

26.9% 31.6%

Table 3: Means and Standard Deviations of Variables Construct Mean N Std. Deviation 2.93 342 0.661 Tangibles 2.71 342 0.721 Reliability 2.99 342 0.735 Responsiveness 3.01 342 0.679 Assurance 3.1 342 0.716 Empathy 2.76 342 0.907 Perceived Service Value 2.88 342 0.817 Passenger Satisfaction 2.9 342 0.872 Behavioural Intentions

5.4 Descriptive Analysis Along with other variables in the study, each of the dimensions of service quality is studied individually. Following is the table 3, which illustrates the mean and standard deviation values for each of the construct. These values are obtained from the whole sample and are

irrespective of flight category. As shown in the table 3, the overall mean of tangibles, reliability, responsiveness, perceived service value, passenger satisfaction, and behavioural intentions is inclined towards negative, that respondents shows mostly a dissatisfaction. This reveals that in general passengers’ perception is not good regarding the

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services provided by the PIA and they are not satisfied with it. Whereas, “Empathy” is the only construct which is

Tangibles Reliability Responsiveness Assurance Empathy Perceived Service Value Passenger Satisfaction Behavioral Intentions

Sci.Int(Lahore),26(4),1749-1755 ,2014

perceived as a bit good and also perception on assurance is undecided

Table 4: Group Statistics-Flight Category Flight Category Number of Respondents Mean Domestic 151 2.99 International 191 2.88 Domestic 151 2.76 International 191 2.67 Domestic 151 3.07 International 191 2.93 Domestic 151 3.07 International 191 2.96 Domestic 151 3.11 International 191 3.09 Domestic 151 2.69 International 191 2.82 Domestic 151 2.88 International 191 2.88 Domestic 151 2.96 International 191 2.86

Std. Deviation .618 .691 .608 .799 .734 .731 .666 .687 .768 .675 .840 .954 .730 .881 .788 .932

Std. Error Mean .050 .050 .049 .058 .060 .053 .054 .050 .062 .049 .068 .069 .059 .064 .064 .067

Table 5: Independent Samples Test Levene's Test for Equality of Variances

Tangibles

Equal variances assumed

F

Sig.

T

df

Sig. (2tailed)

Mean Difference

Std. Error Difference

4.513

.034

1.502

340

.134

.108

1.522

334.805

.129

1.122

340

1.158

339.524

1.786 1.785

Equal variances not assumed Reliability


11.112 .001

Equal variances not assumed Responsiveness Equal variances assumed

.126

.722

Equal variances not assumed Assurance


.043

.837

3.488

.063

3.348

.068

Equal variances not assumed Empathy

Equal variances assumed Equal variances not assumed

Passengers Perceived Value


Passengers Satisfaction


Behavioral Intention


Equal variances not assumed 5.499

.020

3.110

.079

Equal variances not assumed Equal variances not assumed

t-test for Equality of Means 95% Confidence Interval of the Difference Lower

Upper

.072

-.033

.249

.108

.071

-.032

.247

.263

.088

.079

-.066

.243

.248

.088

.076

-.062

.238

340

.075

.142

.080

-.014

.299

321.457

.075

.142

.080

-.015

.300

1.514

340

.131

.112

.074

-.033

.257

1.520

326.198

.130

.112

.074

-.033

.256

.325

340

.745

.025

.078

-.128

.179

.320

300.681

.749

.025

.079

-.131

.181

-1.298

340

.195

-.128

.099

-.322

.066

-1.317

336.058

.189

-.128

.097

-.319

.063

.028

340

.978

.002

.089

-.173

.178

.029

339.259

.977

.002

.087

-.169

.174

1.130

340

.259

.107

.095

-.079

.294

1.153

338.445

.250

.107

.093

-.076

.290

4.4 Independent Sample t-test In order to check whether perception on service quality, perceived service value, passenger satisfaction and The table 4 above illustrates the total number of responses for domestic and international flight categories along with the mean values, standard deviation and maximum and minimum values obtained by the respective dependent variables i.e. SQ dimensions (Tangibles, Reliability,

behavioural intentions vary among domestic and international passengers, independent sample t-test is applied. Following table 4 demonstrates group statistics: Responsiveness, Assurance, Empathy), Perceived Service Value (PSValue), Passenger Satisfaction (P.Satisfaction) and Behavioural Intentions (BIntention). There were no missing values found and out of total of 342 responses, 151 respondents were domestic and 191 were international

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passengers. Moreover, respondents rate tangibility at dissatisfaction in both domestic and international flights of. PIA. Reliability is also rated at the dissatisfaction state in both flight categories along with Passengers Perceived Value, Passenger Satisfaction and Behavioral Intentions. While, Responsiveness and Assurance has shown a bit better picture, i.e., for domestic flights respondents rated PIA at neutral side for both Responsiveness and Assurance while for international flights respondents were dissatisfied. Empathy has been categorized at a neutral place for both domestic and international flights of PIA, showing a bit better picture than all other study constructs Table 5 shows the level of significance against equal variances assumed or equal variances not assumed for both groups. These groups are for domestic and international passengers. i. Tangibles & Reliability: Table 5 shows that for tangibles and reliability, Levene’s Test for Equality of Variances to test whether the variances of Service quality perceptions of airline passengers vary by flight category is rejected that states that the variances are not equal between the domestic and international flights. Since the equal variances are not assumed, T-Test for Equality of Means shows that there does exists the difference between the service quality perception of domestic and international because p-value0.05. The results lead to the finding that:  As recorded, the perceptions on service quality dimensions vary by flight category on for Tangibles and Reliability aspects of the national airline. By interpreting the mean values shown in table 5, the possible reason is international passengers have mostly bad perceptions on the physical equipments and facilities of the airline. Moreover, there has been explored that perceptions on Responsiveness, Assurance and Empathy remain the same irrespective of flight category. Passengers perceived value: Levene’s Test for Equality of Variances is used to test whether the variances of passengers perceived value of airline passengers vary by flight category is accepted that

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states that the variances are equal between the domestic and international flights. Since the equal variances are assumed, T-Test for Equality of Means shows that there does not exist any difference between the passengers perceived value for domestic and international flights because p-value>0.05. This means that  The domestic passenger’s perception about the service value they receive for the price of ticket they pay is the same as international passengers’ perception. The level of significance is at 0.05 < p-value 0.068, which reports no variation in the perceived service value on the basis of flight category. Passengers Satisfaction: To test whether passengers’ satisfaction of airline passengers vary by flight category, Levene’s Test for Equality of Variances is used. Table 5 shows that the variances of passengers’ satisfaction is rejected that states that the variances are not equal between the domestic and international flights. Since the equal variances are not assumed, T-Test for Equality of Means shows that there does exists the difference between the passengers satisfaction of domestic and international because pvalue0.05. The main reason behind this finding can be that  The domestic passenger’s behavioural intentions regarding their word-of-mouth, use in the future and recommendation to a friend, is the same as international passengers’ perception. The level of significance is at 0.05 < p-value 0.079, which concludes no variation in the passengers’ behavioural intentions, on the basis of flight category.

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Table 6 summarizes the results of proposed hypotheses: Research Hypothesis H1 H1a H1b H1c H1d H1e H2 H3 H4

Research Hypotheses Statement Service quality perceptions of airline passengers vary by flight category. Tangibles perceptions of airline passengers vary by flight category. Reliability perceptions of airline passengers vary by flight category. Responsiveness perceptions of airline passengers vary by flight category. Assurance perceptions of airline passengers vary by flight category. Empathy perceptions of airline passengers vary by flight category. Perceived service value by airline passengers vary by flight category. Passenger satisfaction varies by flight category. Behavioural intentions of airline passengers vary by flight category. Table 6: Summary of Hypotheses Results

6. CONCLUSION The passengers who are travelling on domestic routes with the national airline have the same perception about the service value as international passengers have. It means that type of services and their quality is same on both domestic and international routes and passengers perceive service value equally. On the other hand, the survey reveals that the passengers who are travelling on any international route with the same airline are not equally satisfied with the quality of services delivered by the airline, as domestic passengers are. The reason being the varied perceptions of services are provided on domestic and international routes and customers expect more while buying the service. Similarly, the respondents who were travelling within the country and abroad have same intentions to fly with national airline in the future. The rationale behind this finding is that the preference is given to the national airline by the passengers. Respondents believed that they should be travelling with the national airline in order to let it earn profits and benefit. The loyalty to the country is a distinct aspect as revealed in the survey. Furthermore, passengers mentioned that they choose national airline because it offers direct flights to some destinations domestically and internationally, which not only saves their time but also the money. Secondly, the lack of local competitors offering the same route/destination in the marketplace, make passengers to travel with national airline. 6.1 Future Research Implications In further research, the sampling profile can be rearranged for equal percentage of local and foreign passengers in order to generalize the results. In addition, face-to-face interviews can be helpful to get more revealing and relevant data. Same study can be conducted by including all airlines operating in a country. Practically, managers can help PIA to get through this problem of dissatisfaction of passengers by making policies and procedures to improve the quality of service in order to retain passengers and increase their satisfaction towards the PIA. This will not only help the organization in profit making but it will also increase the positive word of mouth for PIA. Passengers satisfaction regarding service quality should be given preference. 7. REFERENCES

Result Accepted Accepted Rejected Rejected Rejected Rejected Accepted Rejected

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